China Fund Shifts Focus Away from Commodities to U.S., European Recovery Plays

The Wall Street Journal

19 February 2014

BEIJING–China Investment Corp. is selling energy and commodity holdings while seeking to capitalize on recovering U.S. and European economies, a major shift in strategy for the $600 billion sovereign-wealth fund.
Since late last year, CIC has unloaded more than $1.5 billion of shares in companies includingAES Corp., a U.S. power company, and GCL-Poly Energy Holdings Ltd., a Hong Kong-listed green-energy company, according to regulatory filings by the companies. CIC, the world’s fifth-largest government-controlled fund, has also sold stakes in two other Hong Kong-traded wind-power companies, according to filings.
In addition, CIC is considering selling direct ownership stakes in certain assets such as oil-sands projects, according to people with knowledge of the fund. The fund is undergoing a “more dynamic adjustment” of its energy portfolio, one of the people said.

… CIC, founded in 2007, invests part of China’s vast hoard of foreign-exchange reserves abroad. The fund’s focus on resources has been widely regarded as “strategically motivated,” said Friedrich Wu, an adjunct associate professor at Nanyang Technological University in Singapore who follows CIC. “China, an export-dependent economy, requires access to secure supplies of energy and natural resources to power its economy,” he said.

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